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I just wanted to update everyone and Technic. I tried connecting my old iPhone 4S to the USB port in the center console, and sure enough, BMW apps isn't connecting either. So it turns out that my USB port is defective. I apologize to anyone for misleading you into thinking that the iPhone 5 is incompatible. It appears it is. The problem seems to be hardware on my end. Hopefully BMW will replace the defective USB port and it will start working.

Did you try different USB cables? A USB stick with music?

USB ports tend to shut down if it detects problems, but they do not go bad out of the blue often. Let the car go to sleep and try different cables and devices before you waste your time at the dealership, IMO.

The cradle works perfect. I never had a problem with the cradle. It seems to be the USB port. It is powered, and recognizes the phone and ipod touch, but it won't connect with anything. Im not sure what is going on. Like you said, I think I will be wasting my time with the dealer. I guess I can always wait until the iPhone 5 snap in adapter comes out in 2 years

The cradle works perfect. I never had a problem with the cradle. It seems to be the USB port. It is powered, and recognizes the phone and ipod touch, but it won't connect with anything. Im not sure what is going on. Like you said, I think I will be wasting my time with the dealer. I guess I can always wait until the iPhone 5 snap in adapter comes out in 2 years

just got iphone 5c today, and purchased the adapter for center console usb/audio plug-in that fit my iphone 4, and iphone 5c - THUS FAR - is not interacting with the vehicle properly... access to itunes (external device) is not working, phone calls are coming through phone - when plugged in - instead of car. i'm going to review all phone/vehicle settings and keep at it, but have 2 weeks to return the phone - with some travel in between - so anyone who has been through this process has any helpful information.. please share. (still reading through this entire thread too, but haven't seen anything that i haven't already tried). to be specific, with my 528i i did not have message and other possible app features (with r cable), just the standard phone and itunes.. but it worked like a charm when ever plugged into center console with bmw audio/usb cable. again, so far, the 5c isn't working... looking for help. thanks!

just got iphone 5c today, and purchased the adapter for center console usb/audio plug-in that fit my iphone 4, and iphone 5c - THUS FAR - is not interacting with the vehicle properly... access to itunes (external device) is not working, phone calls are coming through phone - when plugged in - instead of car. i'm going to review all phone/vehicle settings and keep at it, but have 2 weeks to return the phone - with some travel in between - so anyone who has been through this process has any helpful information.. please share. (still reading through this entire thread too, but haven't seen anything that i haven't already tried). to be specific, with my 528i i did not have message and other possible app features (with r cable), just the standard phone and itunes.. but it worked like a charm when ever plugged into center console with bmw audio/usb cable. again, so far, the 5c isn't working... looking for help. thanks!

started out with black audio/usb cable (from bmw), and apple adapter for new 5c port, and it wasn't working. then tried the longer cable that comes with phone, that you refer to... also wasn't working. however... all is well...
when i first got the phone, and because i have icloud and most things appeared (including itunes), i tested it right from at&t parking lot (that's when it didn't work). once i got home and began searching forums from one computer, i plugged the new phone into other computer to sync and set-up, and went back out to test. everything now works just the same as the iphone 4... actually, BETTER! you all probably know this already, but i was very pleasantly surprised to realize the new iphone 5 w/ios 7 software - when plugged into car and listening to itunes playlist - actually pulls the album artwork into the display inside the car... AWESOME! that never happened before. after wondering for 2+ yrs why bmw wasn't doing more (and basic things) w technology... turns out it was apple's limitation. still believe it could do so much more.
anyway... appreciate you responding and btw, both the adaptor and the new white cable that comes with 5c, work the same in how they interact with the vehicle. for those who want to continue using the existing bmw cable, the adapter - which comes in long & short (short is just the port itself) is $25. obviously the short is ideal if you prefer not having excess cable, and can keep the standard, longer, charger cable in the house, travel, etc.

My iphone 5 only worked after purchasing the BMW adapter for the center console (MY 2010 F07). Just using the lightning cable provided by Apple was insufficient...not sure why, but very convenient for BMW to make a few extra $$, then needed the 30 pin to lightning adapter so RadioShack got some business too... Life was so much easier when my car only had AM/FM and I loved driving with the windows open. Now I'm older and only want to "jam" to JT...living out my younger years vicariously in my car, lol!